Removing mortgage insurance is different for conventional and FHA loans. However, most people may not realize that the removal of mortgage insurance, regardless of loan type, is actually dictated by the federal government.

If you take out an FHA loan, your ability to remove mortgage insurance is predicated on the down payment amount. If you put more than 10% down, you are only required to pay mortgage insurance for 11 years. If you put less than 10% down, then you have to pay mortgage insurance for the entire life of the loan. So, keep that in mind if you are considering an FHA.

Conventional loans carry private mortgage insurance, or PMI. Most people think that once they get to 80% loan to value, the mortgage insurance falls off. That’s not exactly true. The rule states that if you pay mortgage insurance, it automatically falls off at 78% loan to value—but you can request to remove it at 80% LTV. Contact your loan servicer once you reach 80% and ask to get that PMI removed.

Appreciation in value does add another wrinkle to this process. A lot of customers say, “My home appreciated in value since I bought it. Now I have the 20% equity and would like to remove my mortgage insurance.”

That is fine, but the rules for using appreciation as justification are different than the rules based on the original purchase price. You are ineligible to use appreciation as justification years zero through two of owning the home. Between the two and five-year mark, you need 25% equity for justification; after five years, that number goes back down to 20%.

Your loan servicer will require an updated appraisal at that time to make sure that you have subsequent equity levels.

If you have any other questions about removing mortgage insurance, just give me a call or send me an email. I would be happy to help you!

About Wade Betz

Wade joined Guardian Mortgage in January 2006 as a vice president of sales and branch manager at ourDallas, Texas location.

Wade has a message for Guardian’s customers. There’s more to a mortgage than the close. Wade, like his Guardian counterparts, understands that a job well done is a job that lasts the duration of the home loan. Counsel, support and personal service are paramount to becoming a trusted mortgage advisor for Guardian’s clients.

Your local Dallas mortgage lender. Call us at 469-906-2522 to learn more.

Hear what people are saying about us:

We could not have had a better experience with the Betz Team and Guardian Mortgage. My husband and I were wrestling with a big bank loan, and after a lot of back and forth and unresponsiveness, we decided to switch to the Betz Team. Boy, what a difference! Wade, Felisa, Nat...

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We could not have had a better experience with the Betz Team and Guardian Mortgage. My husband and I were wrestling with a big bank loan, and after a lot of back and forth and unresponsiveness, we decided to switch to the Betz Team. Boy, what a difference! Wade, Felisa, Natalia, and Patrice are amazing and walked us through every step of the process. As first-time home buyers, we received the guidance and knowledge we needed. The customer service of the Betz Team is superior and we completely trusted them to help us through this important financial decision.

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- Katie

It was absolutely a pleasure working with Guardian Mortgage and the Betz Team; this is our fifth mortgage with Guardian, and the experience was just as smooth and expeditious as the very first time. The entire staff at Guardian was always so cheerful, responsive, courteous ...

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It was absolutely a pleasure working with Guardian Mortgage and the Betz Team; this is our fifth mortgage with Guardian, and the experience was just as smooth and expeditious as the very first time. The entire staff at Guardian was always so cheerful, responsive, courteous and knowledgeable; it truly eased the stress that such a potentially stressful process can create!

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- Harris

The Betz Team was phenomenal in helping us buy our house. From the beginning when we needed help with our offer letters to then providing a quick close, The Betz Team made sure that we were taken care of. I will recommend them to anyone that is in need of mortgage services....

The Betz Team was phenomenal in helping us buy our house. From the beginning when we needed help with our offer letters to then providing a quick close, The Betz Team made sure that we were taken care of. I will recommend them to anyone that is in need of mortgage services. 10 STARS!

- Laura

We are thrilled to have obtained our mortgage through Wade Betz and his wonderful team at Guardian! I would thoroughly recommend working with him and Natasha and all the others who helped our loan go through. Their web portal was easy to upload documents to and when I had t...

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We are thrilled to have obtained our mortgage through Wade Betz and his wonderful team at Guardian! I would thoroughly recommend working with him and Natasha and all the others who helped our loan go through. Their web portal was easy to upload documents to and when I had the inevitable question I was able to contact someone and get my answer quickly. I'm also happy to keep our mortgage locally here in Texas.

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- Heather

Great service, friendly staff, smooth transaction, as always! Wade is very pleasant to work with, as well as those on his team! He stayed in touch with me at each step along the way and he keeps in touch with us throughout the year as well with helpful tips, recipes and of ...

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Great service, friendly staff, smooth transaction, as always! Wade is very pleasant to work with, as well as those on his team! He stayed in touch with me at each step along the way and he keeps in touch with us throughout the year as well with helpful tips, recipes and of course the Dallas Cowboys game schedule magnet for the fridge! Thanks for everything! I tell everyone how much I have loved working with Guardian Mortgage Co.